US Home Sales Hit 14-Month Low as Borrowing Costs Bite

The National Association of Realtors reported that U.S. home sales plummeted to a 14-month low in August, declining 2% month-over-month to 3.98 million residences. This decline is attributed to persistently high mortgage rates and home prices, both of which are being driven up by surging oil prices and concerns over U.S. public debt.

Mortgage rates surpassed 7% for the first time since May 2025, negatively impacting home-buying activity as they move in opposite directions. Despite this, existing home sales have increased by 1.6% year-to-date, and existing housing inventory rose 3.2% to 1.62 million homes, the highest level since November 2019. This inventory surge provides better negotiation opportunities for homebuyers, though affordability remains a challenge for many, with only 56% of U.S. households able to afford a home priced under $300,000.